Wendel Rosen Business & Legal Updates

Local Governments Likely to Oppose Expanded Delivery Services

CA Bureau of Cannabis Control logo

© 2017 State of California/cannabis.ca.gov

[Special thank you to guest contributor Ana Orozco for this post.]

 

Three weeks have passed since the three agencies overseeing the implementation of California’s new cannabis laws introduced their Proposed Permanent Cannabis Regulations and kicked off a 45-day public comment period. This means that Californians have roughly three weeks left to submit comments in writing, or at public hearings held throughout the state, that could modify the draft permanent regulations. The public review and comment period invites input from the general public and cannabis operators, as well as local governments.

One new and notable draft regulation strongly opposed by local governments and their representatives in Sacramento is the proposed expansion of delivery services to all cities and counties. When voters approved Proposition 64, local jurisdictions understood that the regulations implementing the proposition would give them broad discretion to regulate recreational cannabis, including prohibiting it altogether. However, when state agencies adopted the initial “emergency” regulations they did not address whether local jurisdictions could restrict the delivery of cannabis in their jurisdiction. The Proposed Permanent Cannabis Regulations clarify this ambiguity by stating “A delivery employee may deliver to any jurisdiction within the State of California.”

Not surprisingly, a vocal opponent of the draft permanent regulations is the League of California Cities, which deems protecting local authority in the state’s new cannabis laws a priority under its 2018 Strategic Goals. On July 26, 2018, the League of California Cities submitted a letter to the Bureau of Cannabis Control stating its opposition to the draft and concerns about maintaining local control. Specifically, the letter emphasizes Proposition 64’s stated intent to give cities authority over all commercial cannabis activity, highlights the financial costs cities face in protecting public safety, and questions the Bureau of Cannabis Control’s regulatory power to alter the statutory provisions.

The League’s reasoning against the draft permanent regulations echoes its opposition to Senate Bill 1302 – which also would have allowed cannabis delivery in all jurisdictions – and likely previews the feedback cities and counties will provide during the public comment period. SB 1302 was ordered inactive by its author, Senator Ricardo Lara one month before the draft permanent regulations were introduced. However, the opposition to SB 1302 sheds light on the groups that would oppose the draft permanent regulations. To list a few, SB 1302 was opposed by the California Police Chiefs Association, Urban Counties of California, Rural County Representatives of California, and California State Association of Counties. In a joint letter to Senator Lara, these organizations expressed their concerns about losing local control and fears of “a race to the bottom” effect, in which cannabis sellers flock to jurisdictions with permissive cannabis regulations and low taxes, creating over-concentrated cannabis commerce and monopolies in those jurisdictions.

While no formal statements regarding the draft permanent regulations have been issued by local government organizations, it is expected that they will use the same reasoning as in SB 1302 to oppose the provisions in the draft permanent regulations allowing the delivery of cannabis in all jurisdictions. The contentious discussion will continue  at the upcoming public hearings.

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